Indian e-commerce put at Rs 123 million

About Rs 123 million worth of business was transacted electronically by Indian companies in 1998.

These are the findings of a survey conducted by KPMG India Private Limited on electronic commerce by 116 medium and large organisations, with their annual turnover ranging from Rs 10 million to Rs 1 billion.

Most of the respondents felt e-commerce was crucial to their business strategy and have an annual information technology spending ranging from Rs 100,000 to more than Rs 100 million.

The survey defined electronic commerce as a group of technologies used by companies to communicate with customers or other companies to carry out information gathering or business transactions.

According to the survey, most of these transactions are done through order taking, marketing and communication on the Internet with monetary transactions such as payments and receipts being given the lowest rating.

There are a whole lot of regulatory issues to be tackled on the payment front, head of business development, Darshan Bijur said, adding that local companies cannot pay through credit card as they are always required to back their order or payment with a signature.

Also, the infrastructure is not adequately equipped to carry out such transactions, he pointed out.

About 47 per cent of the respondents mainly use the Internet for news and information. Only 1 and 2 per cent use it for payment and receipts, respectively.

About 63 per cent of the respondents using e-commerce are from the manufacturing and distribution sectors with about 10 per cent being from computers and communications sector, the survey said.

About 58 per cent of the respondents had global reach and about half of them are targeting both other businesses and the end consumers.

Improved customer service (83 per cent) and productivity (78 per cent) are rated as top two potential benefits e-commerce might provide to the organisations surveyed.

Lack of standard payment infrastructure and trading partner's technology are billed as the top two potential barriers to effective adoption of e-commerce in their organisations, the survey said.